The Sekw'el'was Nation's blockade near the mouth of the Seton River on Lillooet's southern outskirts, began at 7 a.m. PT Friday and does not have a set end date.
Traffic on Highway 99 is not being affected, and members said they were only halting hired contractors at the work site.
Chief Michelle Edwards said the District of Lillooet has fast-tracked construction of a water intake upgrade project on land claimed by the Sekw'el'was, and that the project will be appealed to the province's Environmental Appeal Board.
Edwards said the work has the potential to wipe out spawning beds and incubating eggs in a section of Cayoose Creek used by coho, steelhead, chinook, pink, sockeye and bull trout.
"This section of Cayoose Creek is only seven kilometres long and is already impacted by four hydro dams," Edwards said in a written statement. "We are at the tipping point with the health of this river and the life it sustains."
Lillooet Mayor Dennis Bonstron said he doesn't believe the municipality had a regulatory obligation to consult with the band.
Bonstron said he will speak to his council next week to determine whether they will reach out to the First Nation in an effort to put an end to the action.
Map: Mouth of Seton River, south of Lillooet